Egypt Independent

Egyptian pound steady on official, black markets



Egypt's central bank kept the pound steady at LE7.53 to the dollar at a foreign exchange auction on Monday, and the currency remained steady on the black market.

The central bank has kept the official exchange rate steady for more than two months after letting the pound weaken at the start of the year in an attempt to wipe out black-market trading.

The bank said it offered $40 million at auction on Monday and sold $38.4 million at a cut-off price of LE7.5301 per dollar, unchanged from its last auction on Thursday.

The central bank typically holds dollar auctions of $40 million every Sunday, Monday, Wednesday and Thursday. The auction did not take place on Sunday, when the bank instead sold $281 million in the interbank market to meet outstanding demand for staple commodities.

The rates at which banks are allowed to trade dollars are determined by the results of the official auctions, giving the central bank effective control over exchange rates.

Traders in the parallel market said the pound was trading at 7.63/64 to the dollar on Monday, virtually unchanged from the rate quoted after the last regular dollar auction on Thursday.

Black market traders say volumes have fallen dramatically since the central bank's move against them and since it imposed a cap in February on the amount of dollars that can be deposited in banks.

The limit discourages use of the black market by depriving those who exchange dollars outside official channels from a place to keep their funds.